PACIFIC NATGAS: Cali Natgas Fundamentals Lean Bearish

The five Regional Fed services surveys for April (NY, Dallas, KC, Philadelphia, Richmond) combined point to a continued deterioration in the ISM Services barometer when it is published on Monday May 5.

• Current expectations are for a tick lower in ISM services to 50.4 in April from 50.8 prior. That would mark a fresh post-June 2024 low.
• The regional Fed average for current conditions fell to the lowest since May 2020 in April, pointing to potential downside in ISM Services vs consensus (at the time, the ISM index was printing in the 40s.) Four of the five surveys (KC excepted) saw a deterioration of conditions in April vs March.
• This is likewise the lowest that service firms' forward expectations have been since May 2020, per the regional Fed average.

Marist notes in a new survey: “At the 100-day mark of President Donald Trump’s second term in office, a plurality of Americans give his performance a failing grade.” 

• Marist adds: “While Trump’s “F” rating is due mainly to the perceptions of most Democrats and a plurality of independents, a majority of Americans, overall, disapprove of the president’s job performance.”
• The report continues: “On the specific issues of the economy, tariffs, foreign policy, and immigration, President Trump’s approval ratings are upside down. To compound matters for the president, a slim majority of Americans describe the direction in which he is moving the nation as change for the worse; six in ten say the nation’s current economic conditions are a result of President Trump’s policies, and a majority of Americans think that placing tariffs on imports will hurt the U.S. economy.”
• A new survey from NBC News shows that inflation is the most concerning economic issue for voters. The White House is likely to take note of the findings considering inflation’s role as ‘incumbent killer’ in a series of 2024 international elections.
• Trump’s activity on Truth Social suggests he is taking note of a recent surge of negative polling data: “The Polls from the Fake News are, like the News itself, FAKE! We are doing GREAT, better than ever before.”

Figure 1: President Trump’s Grade at 100 Days

Source: Marist

• Fed Funds implied rates are close to the day’s dovish extremes, with the Dec 2025 having pushed through Apr 21 lows for lows seen early Apr 11.
• Implied rates have been on a mostly one-way trip lower since a lack of meaningful progress announced at Bessent’s White House press conference shortly after 0830ET. Data meanwhile saw a mixed JOLTS report (lower openings vs lower layoffs and slightly higher quit rates) but a sour Conference Board consumer survey.
• Cumulative cuts from 5.33% effective: 2.5bp May, 17bp Jun, 40bp Jul, 61bp Sep and 98bp Dec.
• SOFR implied terminal yields are lower still on a relative basis having yesterday pushed back to pre-Apr 9 tariff pause levels.
• SFRU6 trades at session highs of 97.03 (+4.5) for highs since Apr 7 having yesterday cleared 96.97 (Apr 21 high). The yield of 2.975% is some 42bp lower than pre Apr 2 “Liberation Day” tariff announcement levels.